SACRAMENTO (CBS13) – Mayor Kevin Johnson’s chief of staff cited a new study when labeling Sacramento as one of the worst economic regions in the world, but a business expert said the report doesn’t actually state that Sacramento is facing such a dire position.
The California Capitol region has made headlines as one of the epicenters of the foreclosure crisis and as one of the areas hardest hit by government cutbacks, but a new report by the Brookings Institute described Sacramento as one of the “least dynamic” metro economies in either North or South America.
Kunal Merchant, Mayor Johnson’s chief of staff, linked the study in Twitter posting Friday, writing, “Congrats status quo apologists! Sac now worst economic region in WESTERN HEMISPHERE”.
The online posting comes as part of Mayor Johnson’s Think BIG campaign, which aims to help drive support for a new entertainment and sports arena in Sacramento, and Merchant said he wanted to challenge the mentality of some opponents who “don’t realize we need to move forward and take risks.”
“One of the first lessons of leadership is you have to confront the brutal facts,” Merchant said in an interview with CBS13.
Sacramento State business dean Sanjay Varshney said the Brookings Institute study only reflects growth, not of the overall economic situation. Even though Sacramento, Dublin and Greece rank in the study’s bottom five, they have a higher standard of living than the top three regions — Shanghai, China; and Riyadh and Jiddah in Saudi Arabia.
“Just because you are growing fast doesn’t mean you are really becoming richer,” Varshney said. “If you look at some of the cities that rank very high… they are fast growing, but they also happen to be poor cities.”
Also near the bottom of the list: San Francisco, which actually stands as one of the largest metro economies in the world.
The Sacramento region is too dependent on government jobs, but it’s a stretch to call the local economy one of the worst in the world, Varshney said.
The California unemployment rate fell to 11.1 percent in December, a drop of about two-tenths of a percent. The national unemployment average is 8.5 percent.